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OECD model tax convention
TITLE OF THE CONVENTION
Convention between (State A) and (State B)
with respect to taxes on income [and on capital]
PREAMBLE OF THE CONVENTION
CHAPTER 1
SCOPE OF THE CONVENTION
Article 1
PERSONAL SCOPE
This Convention shall apply to persons who are residents of
one or both the Contracting States.
Article
2
TAX COVERED
1. This Convention shall apply to taxes on income and on
capital imposed on behalf of a Contracting State or of its
political sub divisions or local authorities, irrespective
of the manner in which they are levied.
2. There shall be regarded as taxes on income and on capital
all taxes imposed on total income, on total capital, or on
elements of income or of capital, including taxes on gains
from the alienation of movable or immovable property, taxes
on the total amounts of wages or salaries paid by
enterprises, as well as taxes on capital appreciation.
3. The existing taxes to which Convention shall apply are in
particular:
a) (in State A):___________________
b) (in State B):___________________
4. The Convention shall apply also to any identical or
substantially similar taxes which are imposed after the date
of signature of the Convention in addition to, or in place
of, the existing taxes. At the end of each year, the
competent authorities of the Contracting States shall notify
each other changes which have been made in their respective
taxation laws.
CHAPTER II
DEFINITIONS
Article 3
GENERAL DEFINITIONS
1. For the purposes of this Convention, unless the context
otherwise requires:
a) the term “person” includes and individual, a company and
any other body of persons;
b) term “company” means any body corporate or any entry
which is treated as a body corporate for tax purposes;
b) The terms “enterprise of a Contracting State” and
“enterprise of the other Contracting State” mean
respectively an enterprise carried on by a resident of a
Contracting State and an enterprise carried or by a resident
of the other Contracting State;
c) The term “international traffic” means any transport by a
ship or aircraft operated by an enterprise which has its
place of effective management in a Contracting State, except
when the ship or aircraft is operated solely between places
in the other Contracting State;
e) The term “competent authority” means:
i) (in State A):___________________
ii) (in State B):___________________
f) the term “national” means:
i) any individual possessing the nationality of a
Contracting State;
ii) any legal person, partnership or association deriving
its status as such from the laws in force in a Contracting
State.
2. As regards the application of the Convention by a
Contracting State, any term not defined therein shall,
unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the
taxes to which the Convention applies.
Article
4
RESIDENT
1. For the purposes this Convention, the term “resident of a
Contracting State” means any person who, under the laws of
that State, is liable to tax by reason of his domicile,
residence, place of management or any other criterion of a
similar nature. But this term does no include any person who
is liable to tax in that State in respect only of income
from sources in that State or capital situated therein.
2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then
his status shall be determined as follows:-
a) He shall be deemed to be a resident of the State in which
he has a permanent home available to him; if he has a
permanent home available to him in both States, he shall be
deemed to be a resident of the State with which the personal
and economic relations are closer (center of vital
interests);
b) If the State in which he has his center of vital
interests cannot be determined, or if he has not a permanent
home available to him in either State, he shall be deemed to
be a resident of the State in which he has a habitual abode;
c) If he has a habitual abode in both States or in neither
of them, he shall be deemed to be a resident of the State of
which he is a national;
d) If he is a national of both States or of neither of them,
the competent authorities of the Contracting States shall
settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting
States, then it shall be deemed to be a resident of the
State in which its place of effective management is
situated.
Article 5
PERMANENT ESTABLISHMENT
1. For the purposes of this Convention, the term “permanent
establishment” means a fixed place of business through which
the business of an enterprise is wholly or partly carried
on.
2. The term “permanent establishment” includes especially:
a) a place of management’
b) a branch;
c) an office;
d) a factory;
e) a workshop; and
f) a mine, an oil or gas well, a quarry or any other place
of extraction of natural resources.
3. A building site or construction or installation project
constitute a permanent establishment only if it last more
than twelve months.
4. Notwithstanding the preceding provisions of the Article,
the term “permanent establishment” shall be deemed not to
include:
a) The use of facilities solely for the purpose of storage
or display of goods or merchandise belonging to the
enterprise;
b) The maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
storage or display;
c) The maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
d) The maintenance of a fixed place of business solely for
the purpose of purchasing goods or merchandise or the
collecting information, for the enterprise;
e) The maintenance of a fixed place of business solely for
the purpose of carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character.
f) The maintenance of a fixed place of business solely for
any combination of activities mentioned in sub-paragraphs a)
to e), provided that the overall activity of the fixed place
of business resulting from this combination is of a
preparatory or auxiliary character.
5. Notwithstanding the provisions of paragraphs 1 and 2,
where a person –other than an agent of an independent status
to whom paragraph 6 applies- is acting on behalf of an
enterprise and has, and habitually exercises, in a
Contracting State on behalf on an enterprise of the other
Contracting State, an authority to conclude contracts in the
name of enterprise, that enterprise shall be deemed to have
a permanent establishment in that Estate in respect of any
activities which that person undertakes for the enterprise,
unless the activities of such person are limited to those
mentioned in paragraph 4, which, if exercised through a
fixed place of business, would not make this fixed place of
business a permanent establishment under the provisions of
that paragraph.
6. An enterprise shall not be deemed to have a permanent
establishment in the other Contracting State merely because
it carries on business in that other State through a broker,
general commission agent or any other agent of an
independent status, provided that such persons are acting in
the ordinary course of their business.
7. The fact that a company which is a resident of a
Contracting State controls or is controlled by a company
which is a resident of the other Contracting State, or which
carries on business in that other State (whether through a
permanent establishment or otherwise), shall not itself
constitute either company a permanent establishment of the
other.
CHAPTER III
TAXATION OF INCOME
Article 6
INCOME FROM IMMOVABLE PROPERTY
1. Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be
taxed in that other State.
2. The term “immovable property” shall have the meaning,
which it has under the law of the Contracting State in which
the property in question is situated. The term shall in any
case include property accessory to immovable property,
livestock and equipment used in agriculture and forestry,
rights to which the provisions of general law respecting
landed property apply, usufruct of immovable property and
right to variable or fixed payments are consideration for
the working of, or the right to work, mineral deposits,
source and other natural resources, ships, boats and
aircraft shall not be regarded as immovable property.
3. The provisions of paragraph 1 shall also apply to income
derived fro the direct use, letting, or use of any other
form of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to
the income from immovable property of an enterprise and to
income from immovable property used for the performance of
independent personal services.
Article 7
BUSINESS PROFITS
1. The profits of an enterprise of a Contracting State shall
be taxable only in that State unless the enterprise carries
on business in the other Contracting State through a
permanent establishment situated therein. If the enterprise
carries on business as aforesaid, the profits of the
enterprise may be taxed in the other State but only so much
of them as is attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business in the
other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be
attributed to that permanent establishment to profit which
it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing
wholly independently with the enterprise of which it is a
permanent establishment.
3. In determination of the profit of a permanent
establishment, there shall be allowed as deductions expenses
which are incurred for the purposes of the permanent
establishment, including executive general administrative
expenses so incurred, where in the State in which the
permanent establishment is situated or elsewhere.
4. Insofar as it has been customary in a Contracting State
to determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total
profits of the enterprise to its various parts, nothing in
paragraph 2 shall preclude that Contracting State from
determining the profits to be taxed by such an apportionment
as may be customary, the method of apportionment adopted
shall, however, be such that the result shall be in
accordance with the principles contained in this Article.
5. No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the
enterprise.
6. For the purposes of the preceding paragraphs, the profits
to be attributed to the permanent establishment shall be
determined by the same method year by year unless there is
good and sufficient reason to the contrary.
7. Where profits include items of income, which are dealt
with separately in other Articles of this Convention, then
the provisions of those Articles shall not be affected by
the provisions of this Article.
Article 8
SHIPPING, INLAND WATERWAYS TRANSPORT AND AIR TRANSPORT
Article 8A (alternative A)
1. Profits from the operation of ships or aircraft in
international traffic shall be taxable only in the
Contracting State in which the place of effective management
of the enterprise is situated.
2. Profits from the operation of boats engaged in inland
waterways transport shall be taxable only in the Contracting
State in which the place of effective management of the
enterprise is situated.
3. If the place of effective management of a shipping
enterprise or of an inland waterways transport enterprise is
abroad a shi or boat, then it shall be deemed to be situated
in the Contracting State in which the home harbour of the
ship or boat is situated, or, if there is no such home
harbour, in the Contracting State of which the operator of
the ship or boat is a resident.
4. The provisions of paragraph 1 shall also apply to profits
from the participation in a pool, a joint business or an
international operating agency.
Article 9
ASSOCIATED ENTERPRISES
1. Where
a) An enterprise of a Contracting State participate directly
or indirectly in the management, control or capital of an
enterprise of the other Contracting State, or
b) The same persons participate directly or indirectly in
the management, control or capital of an enterprise of a
Contracting State and enterprise of the other Contracting
State, and in either case conditions are made or imposed
between the two enterprises in their commercial or financial
relations which differ from those which would be made
between independent enterprises, then any profits which
would, but for those conditions, have not so accrued, may be
included in the profits of that enterprise and taxed
accordingly.
2. Where a Contracting State includes in the profits of an
enterprise of that State-and taxes accordingly-profits on
which an enterprise of the other Contracting State has been
charged to tax in that other State and the profits so
included are profits which would have accrued to the
enterprise of the first-mentioned State if the conditions
made between the two enterprises had been those whose which
would have been made between independent enterprises, then
that other State shall make an appropriate adjustment to the
amount of the tax charged therein on those profits. In
determining such adjustment, due regard shall be had to the
other provisions of the Convention and the competent
authorities of the Contracting State shall, if necessary,
consult each other.
Article 10
DIVIDENDS
1. Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting
State may be taxed in that other State.
2. However, such dividends may also be taxed in the
Contracting State of which the Company paying the dividends
is a resident and according to the laws of that State, but
if the recipient is the beneficial owner of the dividends
the tax so charged shall not exceed:
a) 5 percent of the gross amount of the dividends if the
beneficial owner is a company (other than a partnership)
which holds directly at least 25 percent of the capital of
the company paying the dividends;
b) 15 percent of the gross amount of the dividends in all
over cases.
3. The term “dividends” as used in this Article means income
from shares “jouissance” shares or “jouissance” rights,
mining shares, founders’ shares or other rights, not being
debt-claims, participating in profits, as well as income
from other cooperate rights which is subjected to the same
taxation treatment as income from shares by the laws of the
State of which the company making the distribution is a
resident.
4. The provisions of paragraphs 1 & 2 shall not apply if the
beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other
Contracting State of which the company paying the dividends
is a resident, through a permanent establishment situated
therein, or performs in that other State independent
personal services from a fixed base situated therein, and
the holding in respect of which the dividends are paid is
effectively connected with such permanent establishment or
fixed base. In such case the provisions of Article 7 or
Article 14, as the case may be, shall apply.
5. Where a company which is resident of a Contracting State
derives profits or income from the other Contracting State,
that other State may not impose any tax on the dividends
paid by the Company, except in so far as such dividends are
paid to a resident of that other State or in so far as the
holding in respect of which the dividends are paid is
effectively connected with a permanent establishment or a
fixed base situated in that other State, nor subject the
company’s undistributed profits to a tax on the company’s
undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or
income arising in such other State.
Article 11
INTEREST
1. Interest arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that
other State.
2. However, such interest may also be taxed in the
Contracting State in which it arises and accordingly to the
laws of that State, but if the recipient is the beneficial
owner of the interest the tax so charged shall not exceed 10
percent of the gross amount of the interest. The competent
authorities of the Contracting State shall by mutual
agreement settle the mode of application of this limitation.
3. The term “interest” as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage and whether or not carrying a right to participate
in the debtor’s profits, and in particular, income from
government securities and income from bonds or debentures,
bonds or debentures. Penalty charges for late payment shall
not be regarded as interest for the purpose of this article.
4. The provisions of paragraphs 1 and 2 shall not apply if
the beneficial owner of the interest, being a resident of a
Contracting State, carries on business in the other
Contracting State in which the interest arises, through a
permanent establishment situated therein, or performs in
that other State independent personal services from a fixed
base situated therein, and the debt-claim in respect of
which the interest is paid is effectively connected with
such permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be,
shall apply.
5. Interest shall be deemed to arise in a Contracting State
when the payer is that State itself, a political
subdivision, a local authority or a resident of that State.
Where, however, the person paying the interest, where he is
a resident of a Contracting State or not, has in a
Contracting State a permanent establishment or a fixed base
in connection with which the indebtedness on which the
interest is paid was incurred, and such interest is borne by
such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the
permanent establishment or fixed base is situated.
6. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the interest, having regard
to the debt-claim for which it is paid, exceeds the amount
which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the
payments shall remain taxable according to the laws of each
Contracting State, due regard being had to the other
provisions of this Convention.
Article 12
ROYALTIES
1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxable only
in that other State if such resident is the beneficial owner
of the royalties.
2. The term “royalties” as used in this Article means
payments of any kind received as a consideration for the use
of, or the right to use, any copyright of literary, artistic
or scientific work including cinematograph films, or films
or tapes used for radio or television broadcasting, any
patent, trade mark, design or model, plan, secret formula or
process, or for information concerning industrial,
commercial or scientific experience.
3. The provisions of paragraphs 1 shall not apply if the
beneficial owner of the royalties, being a resident of
Contracting State, carries on business in the other
Contracting State in which the royalties arise, through a
permanent establishment situated therein, or performs in
that other State independent personal services from a fixed
base situated therein, and the right or property in respect
of which the royalties are paid is effectively connected
with such permanent establishment or fixed base. In such
case the provisions of Article 7 or Article 14, as the case
may be, shall apply.
4. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the royalties, having
regard to the use, right or information to which they are
paid, exceeds the amount which would have been agreed upon
by the payer and the beneficial owner in the absence of such
relationship, the provisions of this Article shall apply
only to the last-mentioned amount. In such case, the excess
part of the payments shall remain taxable according to the
laws of each Contracting State, due regard being had to the
other provisions of this Convention.
Article 13
CAPITAL GAINS
1. Gains derived by a resident of a Contracting State from
the alienation of immovable property referred to in Article
6 and situated in the other Contracting State may be taxed
in that other State.
2. Gains from the alienation of movable property forming
part of the business property of a permanent establishment
which an enterprise of a Contracting State has in the other
Contracting State or of movable property pertaining to a
fixed base available to a resident of a Contracting State in
the other Contracting State for the purpose of performing
independent personal services, including such gains from the
alienation of such a permanent establishment (alone or with
the whole enterprise) or of such fixed base, may be taxed in
that other State.
3. Gains from the alienation of ships or aircraft operated
in international traffic, boats engaged in inland waterways
transport or movable property pertaining to the operation of
such ships, aircraft or boats, shall be taxable only in the
Contracting State in which the place of effective management
of the enterprise is situated.
4. Gains from the alienation of any other than that referred
to in paragraph 1, 2, 3, 4 and 5 shall be taxable only in
the Contracting State of which the alienator is a resident.
Article
14
INDEPENDENT PERSONAL SERVICES
1. Income derived by a resident of a Contracting State in
respect of professional services or other activities of an
independent character shall be taxable only in that State
unless he has a fixed base regularly available to him in the
other Contracting State for the purpose of performing his
activities. If he has such a fixed base, the income may be
taxed in the other State but only so much of it as is
attributable to that fixed base.
2. The term “professional services” includes especially
independent scientific, literary, artistic, educational or
teaching activities as well as the independent activities of
physicians, lawyers, engineers, architects, dentists and
accountants.
Article 15
DEPENDENT PERSONAL SERVICES
1. Subject to the provisions of Articles 16, 18 and 19,
salaries, wages and other similar remuneration derived by a
resident of a Contracting State in respect of an employment
shall be taxable only in that State unless the employment is
exercised in the other Contracting State. If the employment
is so exercised, such remuneration as is derived there from
may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting
State shall be taxable only in the first mentioned State if:
a) the recipient is present in the other State for a period
or periods not exceeding in the aggregate 183 days in the
fiscal year concerned; and
b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the other State; and
c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the
other State.
3. Notwithstanding the preceding provisions of this Article,
remuneration derived in respect of an employment exercised
abroad a ship or aircraft operated in international traffic,
or abroad a boat engaged in inland waterways transport, may
be taxed in the Contracting State in which the place of
effective management of the enterprise is situated.
Article
16
DIRECTORS’ FEES AND REMUNERATION OF TOP-LEVEL MANAGERIAL
OFFICIALS
1. Directors’ fees and other similar payments derived by a
resident of a Contracting State in his capacity as a member
of the Board of Directors of a company which is a resident
of the other Contracting State may be taxed in that other
State.
Article 17
INCOME EARNED BY ENTERTAINERS AND ATHLETES
1. Notwithstanding the provisions of Article 14 and 15,
income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or
television artiste, or a musician, or as sportsman, from his
personal activities as such exercised in the other
Contracting State, may be taxed in that other State.
2. Where income in respect of personal activities exercised
by an entertainer or a sportsman in his capacity as such
accrues not to the entertainer or sportsman himself but to
another person, that income may, notwithstanding the
provisions of Articles 7, 14 and 15 be taxed in the
Contracting State in which the activities of the entertainer
or sportsman are exercised.
Article 18
PENSIONS
Subject to the provisions of paragraph 2 of Article 19,
pensions and other similar remuneration paid to a resident
of a Contracting State in consideration of past employment
shall be taxable only in that State.
Article 19
GOVERNMENT SERVICE
1. (a) Salaries, wages and other similar remuneration, other
than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to an individual in
respect of services rendered to that State or subdivision or
authority shall be taxable only in that State.
(b) However, such salaries, wages and other similar
remuneration shall be taxable only in the other Contracting
State if the services are rendered in that other State and
the individual is a resident of that State who:
(i) Is a national of that State; or
(ii) Did not become a resident of that State solely for the
purpose of rendering the services.
2. a) Any pension paid by, or out of funds created by a
Contracting State or a political subdivision or a local
authority thereof to an individual in respect of services
rendered to that State or subdivision or authority shall be
taxable only in that State.
b) However, such pension shall be taxable only in the other
Contracting State if the individual is a resident of, and a
national of, that other State.
3. The provisions of Article 15, 16 and 18 shall apply to
salaries, wages and other similar remuneration, and to
pensions, in respect of services rendered in connection with
the business carried on by a Contracting State or political
subdivision or a local authority thereof.
Article 20
STUDENTS
1. Payments which a student or business apprentice who is or
was immediately before visiting a Contracting State a
resident of the other Contracting State and who is present
in the first-mentioned State solely for the purpose of his
education or training receives for the purpose of his
maintenance, education or training shall not be taxed in
that State, provided that such payments arise from sources
outside that State.
Article
21
OTHER INCOME
1. Items of income of a resident of a Contracting State,
wherever arising, not dealt with in the foregoing articles
of this Convention shall be taxable only in that State.
2. The provisions of paragraph 1 shall not apply to income,
other than income from immovable property as defined in
paragraph 2 of Article 6, if the recipient of such income,
being a resident of a Contracting State, carries on business
in the other Contracting State through a permanent
establishment situated therein, or performs in that other
State independent personal services from a fixed base
situated therein, and the right or property in respect of
which the income is paid is effectively connected with such
permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be,
shall apply.
CHAPTER IV
TAXATION OF CAPITAL
Article 22
CAPITAL
1. Capital represented by immovable property referred to in
Article 6, owned by a resident of a Contracting State and
situated in the other Contracting State, may be taxed in
that other State.
2. Capital represented by movable property forming part of
the business property of a permanent establishment which an
enterprise of a Contracting State has in the other
Contracting State or by movable property pertaining to a
fixed base available to a resident of a Contracting State
and situated in the other Contracting State for the purpose
of performing independent personal services, may be taxed in
that other State.
3. Capital represented by ships and aircraft operate in
international traffic and by boats engaged in inland
waterways transport, and by movable property pertaining to
the operation of such ships, aircraft and boats, shall be
taxable only in the Contracting State in which the place of
effective management of the enterprises is situated.
4. All other elements of capital of a resident of a
Contracting State shall be taxable only in that State.
CHAPTER V
METHODS FOR ELIMINATION OF DOUBLE TAXATION
Article 23A
EXEMPTION METHOD
1. Where a resident of a Contracting State derives income or
owns capital which, in accordance with the provisions of
this Convention, may be taxed in the other Contracting
State, the first-mentioned State shall, subject to the
provisions of paragraphs 2 and 3, exempt such income or
capital from tax.
2. Where a resident of a Contracting State derives items of
income, which, in accordance with the provisions of Articles
10 and 11 may be taxed in the other Contracting State, the
first-mentioned State shall allow as a deduction from the
tax paid in that other State. Such deduction shall not,
however, exceed that part of the tax, as computed before the
deduction is given, which is attributable to such items of
income derived from that other State.
3. Where in accordance with any provision of the Convention
income derived or capital owned by a resident of a
Contracting State is exempt from tax in that State, such
State may nevertheless, in calculating the amount of tax on
the remaining income or capital of such resident, take into
account the exempted income or capital.
Article 23B
CREDIT METHOD
1. Where a resident of a Contracting State derives income or
owns capital which, in accordance with the provisions of
this Convention may be taxed in the other Contracting State,
the first-mentioned State shall allow:
i. as a deduction from the tax on the income of that
resident, an amount equal to the income tax paid in that
other State:
ii. as a deduction from the tax on the capital of the
resident, an amount equal to the capital tax paid in that
other State.
Such deduction in either case shall not, however, exceed
that part of the income tax or capital tax, as computed
before the deduction is given, which is attributable, as the
case may be, to the income or the capital which may be taxed
in that other State.
2. Where, in accordance with any provision of this
Convention, income derived or capital owned by a resident of
a Contracting State is exempt from tax in that State, such
State may nevertheless, in calculating the amount of tax on
the remaining income or capital of such resident, take into
account the exempted income or capital.
CHAPTER VI
SPECIAL PROVISIONS
Article 24
NON-DISCRIMINATION
1. Nationals of a Contracting State shall not be subjected
in the other Contracting State to any taxation or any
requirement connected therewith, which is other or more
burdensome than the taxation and connected requirements to
which nationals of that other State in the same
circumstances are or may be subjected. The provision shall,
notwithstanding the provisions of Article 1, also apply to
persons who are not residents of one or both of the
Contracting States.
2. Stateless persons who are residents of a Contracting
State shall not be subjected in either Contracting State to
any taxation or any requirement connected therewith which is
other or more burdensome than the taxation and connected
requirements to which nationals of the State concerned the
same circumstances are or may be subjected.
3. The taxation on a permanent establishment which an
enterprise of a Contracting State has in the other
Contracting State shall not be less favourably levied in
that other State carrying on the same activities. This
provision shall not be constructed as obliging a Contracting
State to the grant to residents of the other Contracting
State any personal allowances, relief’s and reductions for
taxation purposes on account of civil status or family
responsibilities, which it grants to its own residents.
4. Except where the provisions of paragraph 1 of Article 9,
paragraph 6 of Article 11, or paragraph 6 of Article 12,
apply, interest, royalties and other disbursements paid by
an enterprise of a Contracting State to a resident of the
other Contracting State shall, for the purpose of
determining the taxable profits of such enterprise, be
deductible under the same conditions as if thy had been paid
to a resident of the first-mentioned State. Similarly, any
debts of an enterprise of a Contracting State to a resident
of the other Contracting State shall, for the purpose of
determining the taxable capital of such enterprise, be
deductible under the same conditions as if they had been
contracted to a resident of the first mentioned State.
5. Enterprises of a Contracting State, the capital of which
is wholly or partly owned or controlled, directly or
indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the
first-mentioned State to any taxation or any requirement
connected therewith which is other or more burdensome than
the taxation and connected requirements to which other
similar enterprises of the first-mentioned State are or may
be subjected.
6. The provisions of this Article shall, notwithstanding the
provisions of Article 2, apply to taxes of every kind and
description.
Article
25
MUTUAL AGREEMENT PROCEDURE
1. Where a person considers that the actions of one or both
of the Contracting States result or will result for him in
taxation not in accordance with the provisions of this
Convention, he may, irrespective of the remedies provided by
the domestic law of those States, present his case to the
competent authority of the Contracting State of which he is
a resident or, if his case comes under paragraph 1 of the
Article 24, to that of the Contracting State of which he is
a national. The case must be presented within three years
from the first notification of the action resulting in
taxation not in accordance with the provisions of the
Convention.
2. The competent authority shall endeavour, if the
projection appears to it to be justified and if it is not
itself able to arrive at a satisfactory solution, to resolve
the case by mutual agreement with the competent authority of
the other Contracting State, with a view to the avoidance of
taxation, which is not in accordance with this Convention.
Any agreement reached shall be implemented notwithstanding
any time limits in the domestic law of the Contracting
States.
3. The competent authorities of the Contracting State may
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of
the Convention. They may also consult together for the
elimination of double taxation in cases not provided for in
the Convention.
4. The competent authorities of the Contracting State may
communicate with each other directly for the purpose of
reaching an agreement in the sense of the preceding
paragraphs. When it seems advisable in order to reach
agreement to have an oral exchange of opinions, such
exchange may take place through a Commission consisting of
representatives of the competent authorities of the
Contracting States.
Article 26
EXCHANGE OF INFORMATION
1. The competent authorities of the Contracting States shall
exchange such information as is necessary for carrying out
the provisions of this Convention or of the domestic laws of
the Contracting States concerning taxes covered by the
Convention insofar as the taxation there under is not
contrary to the Convention, in particular for the prevention
of fraud of evasion of such taxes. The exchange of
information is not restricted by Article 1. Any information
received by a Contracting State shall be treated as secret
in the same manner as information obtained under the
domestic laws of that State and shall be disclosed only to
persons or authorities (including courts and administrative
bodies) involved in the assessment or collection or, the
enforcement or prosecution in respect of, or the
determination of appeals in relation to the taxes covered by
the Convention. Such persons or authorities shall use the
information only for such purposes. They may disclose the
information in public court proceedings or in judicial
decisions..
2. In no case shall the provisions of paragraph 1 be
construed so as to impose on a Contracting State the
obligation:
a) To carry out administrative measures at variance with the
laws and administrative practice of that or of the other
Contracting State;
b) To supply information which is not obtainable under the
laws or in the normal course of the administration of that
or of the other Contracting State;
c) To supply information which would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or information, the disclosure of which would
be country to public policy (order public).
Article 27
MEMBERS DIPLOMATIC MISSION AND CONSULAR POSTS.
Nothing in this Convention shall affect the fiscal
privileges of number of diplomatic missions or consular
posts under the general rules of international law or under
the provisions of special agreements.
Article 28
TERRITORIAL EXTENSION
1. This Convention may be extended, either in its entirely
or with any necessary modifications (to any part of the
territory of (State A) or the (State B) which is specially
excluded from the application of the Convention or], to any
State or territory for whose international relations (State
A) or (State B) is responsible, which imposes taxes
substantially similar in character to those to which the
Convention applies. Any such extension shall take effect
from such date and subject such modifications and
conditions, including conditions as to termination, as may
be specified and agreed between the Contracting States in
notes to be exchanged through diplomatic channels or in any
other manner in accordance with their constitutional
procedure.
2. Unless otherwise agreed by both Contracting States, the
termination of the Company by one of them under Article 30
shall also terminate, in the manner provided for in that
Article, the application of the Convention [to any part of
the territory of (State A) or of (State B) or ] to any State
territory it has been extended under this Article.
CHAPTER VII
FINAL PROVISIONS
Article 29
ENTRY INTO FORCE
1. This Convention shall be ratified and the instruments of
ratification shall be exchanged at _____________as soon as
possible.
2. The Convention shall enter into force upon the exchange
of instruments of ratification and its provisions shall have
effect:
Article 30
TERMINATION
This Convention shall remain in force until terminated by a
Contracting State. Either Contracting State may terminate
the Convention, through diplomatic channels, by giving
notice of termination at least six months before the end of
any calendar year after the year__________. In such event,
the Convention shall cease to have effect:
a) (in State A)______________________
d) (in State B)______________________
TERMINAL CLAUSE
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